For the year ended December 31, 2012, the financial services segment reported pretax earnings of $13.1 million, compared to $5.7 million for the same period in 2011. This improvement was primarily attributable to increases in locked loan pipeline and origination volumes and to higher title income, partially offset by a rise in personnel and legal expenses and by interest related to the financial services credit facility that was entered into during December 2011.The Company’s net loss from discontinued operations totaled $2.0 million, or $0.04 per diluted share, for the year ended December 31, 2012, compared to a net loss of $20.9 million, or $0.47 per diluted share, for the same period in 2011. OVERALL EFFECTIVE TAX RATE The Company had an overall effective income tax expense rate of 3.8 percent for the year ended December 31, 2012, compared to an overall effective income tax benefit rate of 5.3 percent for the year ended December 31, 2011. For the years ended December 31, 2012 and 2011, the Company recorded a net valuation allowance decrease of $11.6 million and an increase of $16.6 million, respectively, against its deferred tax assets. As of December 31, 2012, the balance of the Company’s deferred tax valuation allowance was $258.9 million. FINANCIAL SERVICES CREDIT FACILITY In December 2012, Ryland Mortgage Company and its subsidiaries and RMC Mortgage Corporation (collectively referred to as “RMC”) renewed its $75.0 million repurchase credit facility with JPMorgan Chase Bank, N.A. This facility is used to fund, and is secured by, mortgages originated by RMC, pending the sale of those mortgages by RMC. This facility will expire in December 2013. At December 31, 2012, the Company had no outstanding borrowings against this credit facility. TREND HOMES ACQUISITION In December 2012, the Company acquired the Phoenix, Arizona, operations and assets of Trend Homes. This acquisition has provided the Company with an ongoing successful operation in that market and 1,020 additional lots and homes. For the quarter and year ended December 31, 2012, there were 113 new orders and 21 closings related to this acquisition.